Aug 13, 2013

    S'pore GDP surges

    SINGAPORE'S economy grew at a better-than-expected pace in the second quarter and the Government raised the city-state's outlook for the year on expectations of a gradual pick-up in global growth in coming months.

    Singapore, whose economy is heavily reliant on trade, manufacturing and financial services, said gross domestic product (GDP) expanded 15.5 per cent in the April-June period on a quarter-on-quarter, seasonally-adjusted and annualised rate, faster than the advance estimate of 15.2 per cent.

    From a year ago, the Singapore economy grew by 3.8 per cent, faster than the preliminary estimate of 3.7 per cent.

    The growth outlook for the year was also raised to 2.5 to 3.5 per cent, from an earlier forecast of 1-3 per cent.

    Prime Minister Lee Hsien Loong had disclosed the upward revision in the growth outlook during his National Day address last Thursday, but the strength of some of the sectors in the second quarter still came as a surprise to many forecasters.

    "Nobody expected the large upward revision in services," said Barclays economist Joey Chew. "I had expected a pullback in financial services after the strong Q1 and the market volatility in June."

    Financial services expanded by 9.2 per cent at an annualised quarter-on-quarter pace following a 51.2 per cent expansion in the first quarter, while wholesale and retail trade surged by 22.1 per cent.

    Singapore's manufacturing sector, which has been in the doldrums for over a year, grew by 32.1 per cent in the second quarter from the first at an annualised and seasonally-adjusted pace, turning around from a 12.1 per cent contraction in the first three months of this year.

    The Singapore dollar strengthened slightly on the back of the stronger-than-expected GDP data and bullish outlook, although a central-bank official said the monetary-policy stance of allowing a modest and gradual appreciation of the local currency remained appropriate.